Ever since North Carolina State University Chancellor Marye Anne Fox announced she was leaving Raleigh and taking a similar position at the University of California at San Diego, UNC officials have been discussing concerns over how the system pays chancellors and ways to address those concerns.
Fox left her $248,225 annual salary at N.C. State to take the UCSD chancellor position having an annual salary of $350,000. Her pay at UCSD also represents an increase of almost $70,000 over the previous chancellor’s salary. According to the cost of living rates for San Diego and Raleigh in the ACCRA Cost of Living Index, it is significantly more expensive to live in San Diego than it is in Raleigh.
UNC officials and supporters pointed to the gap between Fox’s pay at N.C. State and her new salary at UCSD to argue that the UNC system is not paying enough to keep its chancellors in North Carolina. Some, mindful of the state’s budgeting difficulties and citing how some public universities in the nation compensate their leaders, argued that UNC institutions rely too much on the state to support chancellor’s salaries and that UNC should instead should use private donations to supplement those salaries.
In July such talk was tabled when members of the UNC Board of Governors opposed a plan to allow the 16 UNC institutions to supplement the state salary for chancellors with funding from private donations. The practice was previously used in the early 1990s, but was ended in 1997.
Among the institutions that wanted to be allowed to use private donations to increase chancellor salaries was N.C. State, which has begun the process of searching for Fox’s replacement. UNC-Chapel Hill trustees members told The Herald-Sun of Durham that they would have been in favor of the proposal as well.
Brad Wilson, chairman of the UNC board, however, led the opposition to using private sources to increase chancellor salaries. Wilson said allowing private donors to contribute money to chancellor salaries would be a conflict of interest.
“Unlimited use of private funds creates an inherent conflict of interest,” Wilson told The Herald-Sun. “It certainly creates the perception of ‘who do you work for.’ Are you working for a private foundation, or are you working for the people of North Carolina?”
Nationally, however, several institution and system leaders receive portions of their salaries from private donations, according to The Chronicle of Higher Education.
A recent salary report produced by the Chronicle shows that nearly 40 institution or system leaders receive portions of their salaries from private donors. Several others receive other benefits, including deferred compensation and cars, from private donations or foundations.
Several Texas higher-education leaders, including those at the University of Texas and Texas A&M, receive a vast majority of their salary from private donations. Only the University of Houston’s Jay Gouge receives all of his salary ($387,500) in state funding.
Texas A&M President Robert M. Gates receives $246,055 in private donations and $65,945 in state funding. He also receives $100,000 in deferred compensation from private donations. University of Texas President Larry Faulkner receives $65,945 as well in state salary and $187,279 in private donations. Other benefits include $93,000 in deferred compensation and $5,313 in club memberships, all paid from private sources.
A little closer to North Carolina, some state institutions in South Carolina and Virginia also use private donations to offset some of the costs of chancellor salaries, according to the Chronicle report. In Virginia, University of Virginia President John T. Casteen III receives $146,971 in state funding toward his salary, while private sources contribute about $142,971. The University of Virginia is in the midst of a $3 billion campaign to become a private-public institution. Virginia Tech President Charles Steger receives $148,089 in state funding and $151,911 in private funds to make up his salary.
In South Carolina, Andrew Sorensen’s University of South Carolina salary is nearly evenly split between state and private sources, with $215,000 coming from the state and $205,000 coming from private donations. Clemson University’s James Barker receives $172,550 in state funding, while $106,464 comes from private sources.
Notably, one school has recently ended ties with its private foundation that contributed funding to its chancellor’s salary. The University of Georgia severed ties to its foundation when it attempted to lower its contribution to President Michael Adams’s salary. The school’s foundation was upset that Adams had fired the school’s athletics director and former football coach Vince Dooley.
“All you have to do is look at the current controversy at the University of Georgia and say to yourself ‘Lesson Learned,’” Wilson told The News and Observer of Raleigh.
Though the UNC board has ruled against private donations to help pay for chancellor salaries, it is willing to consider private sources to contribute funds toward deferred compensation or other benefits.
According to the Chronicle report, Fox received at least one perk through non-state appropriation funds. Her car was purchased through the school’s foundation.
Along with private contributions to chancellor salaries, UNC board members also considered raising the salaries of several UNC chancellors, including UNC-CH’s James Moeser. That proposal was before the board as members voted down private salary supplements.
Board members set in essence what amounts to a benchmark for chancellor salaries in North Carolina. The pay for chancellors and other administrators within the UNC system must be at least at the 25th percentile in their peer group, as defined by their respective universities.
Five leaders and UNC President Molly Broad would receive a significant pay raise under the plan, if funds are available. Moeser would receive an additional $48,767 to take his salary to nearly $305,000. Broad’s salary would be increased from $300,485 to nearly $360,000.
At the beginning of the 2004 fiscal year, the UNC system spent $3.32 million on the salaries of its 16 chancellors and Broad. That amount will increase during the 2005 fiscal year, regardless if the raises are implemented, because several new chancellors have been hired at rates higher than their predecessors.
Board members are expected to discuss the increased salaries when they meet in September for their regular meeting.
Sanders is an assistant editor of Carolina Journal.